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Legal Short-Term Rentals on the Rise

Since a Maui County ordinance creating a procedure to legalize short-term rental houses was passed in May of last year, eight properties have been permitted on Molokai to serve as vacation rentals. The two most recent permits were granted by the Molokai Planning Commission (MoPC) last week, receiving widespread support from neighbors in the east end Waialua community.

Before the ordinance, only two Molokai homes were operating as legal short-term rentals, after going through a lengthy permitting process. Short-term rentals have long been contended on Molokai; with few accommodations for visitors, many homeowners rent their houses on a short-term basis, even though county law had prohibited the practice in the past. Under the new ordinance, homeowners still need to submit applications for a permit to operate a short-term rental, but the law establishes ground rules designed to streamline the legalization process and ensure proper management.

“Six short-term rentals on Molokai have been approved administratively since the ordinance passed last May [not including the two approved last week],” said Clayton Yoshida, administrator of the county’s Current Planning Division.

Under current short-term rentals laws, Molokai applications only require the approval of the MoPC under certain circumstances. Most applications are approved by Planning Department administration.

The law requires that applicants notify land and homeowners within 500 feet of the proposed rental property of their application. Signage along the access road to the property is also required during the application process. If two or more protests — or a certain percentage of owners or lessees within 500 feet, depending on the lot density– are received within a 45-day comment period, that triggers the MoPC’s review of the application. Another trigger of MoPC approval is if an existing short-term rental home is already operating within 500 feet of the proposed operation.

The short-term rental homes approved last week were within 500 feet of existing rental operations.

Both properties received letters and public testimony supporting their approval.

“I am in support because my ohana rents [the house] sometimes and it’s always available to us,” said east end resident Ruch Manu, urging commissioners to approve a rental property owned by Peter Fukunaga. “I’m talking for the rest of my family. We, as a community and family of Waialua, support it.”

Testifiers said Fukunaga is a long-time Hawaii resident, and his application received three letters of support and no protests, according to Maui County Molokai planner Ben Sticka.

The other short-term rental, owned by Elizabeth Jackson, received seven letters of support and no protests.

“I have owned this home for over 13 years… and it was a short term rental when I purchased it,” said Jackson, adding she’s careful in her management of the property.

Unlike bed and breakfast operations, which require the owner to live on the property, short-term rental managers are not mandated to live on-site. However, the law does require them to live within 30 miles of the rental and respond to any complaints within one hour.

Both properties will be managed by Molokai real estate agent and Waialua kama`aina Lisa Willing.

“It’s important to see east end people coming out to support [the applications]… because they’re the ones that have to deal with it on daily basis,” said commissioner Sherry Tancayo.

With a cluster of short-term rentals growing in the Waialua area, Sticka said there are currently no limitations for the number of permitted operations on Molokai. There are limitations in some areas of Maui. He said the Maui County Council will be reviewing the progress and effectiveness of the short-term rental ordinance this spring, and that would be an opportunity to create limitations for Molokai if needed.

Despite the recent influx in approved permits to operation short-term rentals, Sticka said it is unknown how many Molokai homeowners are still operating short-term rentals illegally.